On January 17th, the State Bank of Vietnam (SBV) held a ceremony to announce the decision to compulsorily transfer Global Petroleum Commercial Bank (GPBank) to Vietnam Prosperity Commercial Bank ( VPBank ) and DongA Commercial Bank (DongA Bank) to Ho Chi Minh City Development Commercial Bank (HDBank).

Following the mandatory transfer, GPBank and DongA Bank will be limited liability commercial banks with 100% of their charter capital owned by VPBank and HDBank, respectively.

Under the management of VPBank, with HDBank acting as the owner, all legitimate rights of depositors and customers at GPBank and DongA Bank continue to be guaranteed in accordance with the agreement and legal regulations.

VPBank and HDBank are joint-stock commercial banks with sufficient capacity, experience, and a solid foundation to successfully implement mandatory transfer plans.

At the same time, with the mechanism applied according to legal regulations, the mandatory transfer also presents an opportunity for VPBank and HDBank to expand their operations and implement new, modern business models.

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Governor of the State Bank of Vietnam, Nguyen Thi Hong, congratulates the banks that received and were subject to mandatory transfers. Photo: Mai Phuong.

On its part, VPBank stated that it will contribute capital to GPBank during the mandatory transfer period to provide GPBank with additional financial resources, develop its business, and improve its performance; the total capital contribution will not exceed 20% of VPBank's charter capital.

“The capital contribution will be carefully considered by the bank and will be subject to approval by the General Meeting of Shareholders to ensure both capital safety and shareholder interests. In addition, VPBank will transfer experience and knowledge to support the restructuring process of GPBank under a mandatory transfer plan,” VPBank stated.

HDBank, on the other hand, affirms that DongA Bank remains an independent legal entity and its financial statements are not consolidated with HDBank. DongA Bank is managed and supported by HDBank to gradually recover its operations and improve its financial situation.

DongA Bank and HDBank will benefit from supportive policies and mechanisms from the State Bank of Vietnam to ensure an effective mandatory transfer process. HDBank has experience in successfully implementing several restructuring and M&A projects safely and effectively, bringing stability and development to all participating parties.

HDBank will focus its resources and restructuring experience to accompany and support DongA Bank in consolidating its operations, overcoming shortcomings, and aiming to build DongA Bank into a financially sound, safe, and sustainably developing bank.

VPBank and HDBank are leading banks in the Vietnamese banking system, possessing strong financial potential. The mandatory transfer of GPBank to VPBank and DongA Bank to HDBank is expected to help revive these two banks, while ensuring the legitimate rights of shareholders and employees of the two receiving banks.

Compulsory transfer is one of the options for restructuring credit institutions under special supervision as stipulated in the Law on Credit Institutions.

This is one of the solutions aimed at contributing to ensuring macroeconomic stability, national financial and monetary security, political stability, and social order and safety.

This issue has received attention from competent authorities, with the Government and the Prime Minister providing decisive direction. The State Bank of Vietnam has closely coordinated with ministries, sectors, and relevant agencies to direct banks to develop mandatory transfer plans for submission to competent authorities for approval in accordance with legal regulations.